2024's Eight Major Corporate Collapses: What Went Wrong and Why

When a well-known restaurant or retailer announces it’s shutting down, most assume immediate closure. But the business landscape is more nuanced. Companies going out of business through bankruptcy often pursue Chapter 11 restructuring—a strategic move allowing them to reorganize debt, maintain operations, and potentially recover. Yet statistics tell a sobering story: according to debt resolution experts, only roughly 10% of Chapter 11 filings succeed, with the majority sliding into Chapter 7 liquidation where companies cease operations and sell assets.

The year 2024 has seen its share of high-profile corporate struggles. Rising inflation, shifting consumer behavior, and persistent operational costs have forced established names to file for bankruptcy. Here’s a comprehensive look at eight major companies that went bankrupt this year.

Red Lobster: A Seafood Icon Faces Reality

The seafood restaurant chain shocked diners when it filed for Chapter 11 bankruptcy, revealing over $1 billion in debt against less than $30 million in cash reserves. Once synonymous with affordable lobster and shrimp dinners for American families, Red Lobster has been forced to shutter numerous locations nationwide, leaving many communities without the casual dining experience they’d grown accustomed to.

iSun: Solar Energy Sector Under Strain

This solar energy systems provider filed for Chapter 11 this year, raising broader concerns about the renewable energy industry’s health. Rising interest rates emerged as a critical factor—higher borrowing costs both weakened the company directly and discouraged customers from financing solar system purchases, compounding iSun’s financial challenges.

LaVie Care Centers: Healthcare Labor Crisis Deepens

Among the largest U.S. skilled nursing facility operators, LaVie Care Centers filed for Chapter 11 bankruptcy, citing elevated labor expenses and lingering pandemic effects. Operating dozens of nursing homes and assisted living properties across five states under multiple brand names, the company employed over 3,500 workers before its collapse.

Takeoff Technologies: E-Commerce Fulfillment Falters

Though less recognizable to consumers, Takeoff Technologies provided critical infrastructure for online grocery ordering. Its spring bankruptcy reflects deeper industry turbulence—while pandemic-era demand for e-commerce fulfillment surged temporarily, grocers have since shifted strategy toward price-conscious shoppers, eroding the sales momentum that pandemic-driven inflation once provided.

rue21: Teen Retail’s Repeated Stumble

The teen fashion retailer went bankrupt and announced total store closures, marking its third bankruptcy filing. Retailers have increasingly struggled as inflation dampened consumer spending while e-commerce competitors intensified pressure, making physical retail a particularly challenging environment.

Joann: Craft Retail’s Uncertain Path

This fabric and craft supplier filed for bankruptcy in March but avoided full liquidation. With approximately 850 locations across 49 states, Joann had expanded aggressively when going public in 2021 during the pandemic’s DIY boom. However, that consumer enthusiasm has since normalized.

Express: The Mall Retailer’s Long Decline

Express, operating its flagship brand alongside Bonobos and UpWest, filed for Chapter 11 and announced significant store closures. The longtime mall-based chain struggled to adapt to changing fashion trends and consumer preferences. The shift toward remote work further strained sales—fewer commuters meant reduced demand for office wear and casual workwear. Additionally, traditional mall locations faced mounting costs amid declining foot traffic, squeezing profit margins.

KidKraft: Toy Industry Transitions

After more than five decades in business, toy company KidKraft filed for Chapter 11 and agreed to sell its U.S. and Canadian operations to Backyard Products. The toy sector faced sales headwinds similar to broader retail challenges. Management expressed optimism that the transition would preserve the brand’s legacy and product quality under new ownership.

The Broader Pattern

These eight companies going out of business—spanning restaurants, retail, healthcare, solar energy, and consumer goods—reveal interconnected economic pressures: elevated operating costs, residual inflation concerns, and a competitive landscape reshaped by pandemic-era changes that didn’t persist. Whether through restructuring or full liquidation, 2024 has served as a reckoning year for established corporations unable to adapt swiftly enough.